Jersey Adopts Legislation to Implement Pillar Two from 2025

The States Assembly unanimously adopted legislation to implement a Pillar Two Income Inclusion Rule and a multinational corporate income tax from 2025, to enact the OECD’s global minimum tax framework for large in-scope multinational groups.

In-scope Jersey companies and branches of multinational groups will pay an effective rate of 15% on their Jersey profits under the new Multinational Corporate Income Tax (MCIT) for accounting periods starting on or after 1 January 2025.

Jersey will also impose a top-up tax on low-taxed profits outside of the Island under the OECD’s Pillar Two Income Inclusion Rule (IIR) but will not apply the Undertaxed Profits Rule (UTPR).

Over 95% of Jersey companies will be unaffected by this Pillar Two legislation and will remain within the existing Jersey income tax regime.